2017 WEL Networks
|
Annual Report
50
WEL NETWORKS LIMITED
Notes to the financial statements
For the year-ended 31 March 2017
(continued)
8 NON-CURRENT ASSETS – PROPERTY,
PLANT AND EQUIPMENT
(continued)
(a)
Revaluations and impairment review
Land and buildings were revalued to market value for highest and best use on a value in use basis, on 31 March 2013
by independent valuers, Telfer Young (Waikato) Ltd Registered Valuers using a comparable sales approach.
The Group’s electricity distribution network was revalued as at 31 March 2016 to fair value by independent expert.
The fair values were established in accordance with NZ IAS 16 – Property, Plant and Equipment and IFRS 13 Fair Value
Measurement. The valuation was prepared using discounted cash flow methodology. It is a level 3 valuation.
The key assumptions used in the valuation of the Distribution Network as at 31 March 2016 include the
following assumptions:
If measured at cost the carrying values would be:
Land and
buildings
$’000
Distribution
network
$’
000
Fibre
network
$’000
Cost
10,020
513,016
-
Accumulated depreciation
(518)
(168,050)
-
Net book amount at 31 March 2016
9,502
344,966
-
Cost
9,600
536,607
402,134
Accumulated depreciation
(666)
(177,955)
(9,973)
Net book amount at 31 March 2017
8,934
358,652
392,161
Description
Valuation
assumptions
adopted
Low
High
Valuation
impact*
WACC
6.5%
6%
7%
+/- $22m
CPI
2.0%
1.5%
2.5%
+/- $24m
Real Growth
2.5%
1.75%
2.75%
+/- $4m
* impact between the adopted assumption and the low/high assumption.
